Thiesse's Thoughts

As would be expected with rapidly increasing fuel costs, average 2006 custom rates for most farm work have also risen, compared to 2005 custom rates. The average cost of diesel fuel in the upper Midwest is approximately 50 percent higher than a year ago, and most custom rates for farm work in 2006 are 4-7 percent above the rates a year earlier, with an average increase of about 5 percent. The largest increases in custom rates in 2006 were for tillage and harvest operations, which tend to use more fuel than some other farm operations. In addition to higher fuel costs, increasing cost for new and used machinery is also a factor in the higher custom rates for 2006.

These results are based on the annual “Iowa Farm Custom Rate Survey” that is coordinated and analyzed by Iowa State University. The survey sampled 165 custom operators, farm managers and ag lenders on what they expected 2006 custom farm rates to be for various farm operations in 2006. The survey summary lists the average custom rate and the range for various tillage, planting, fertilizer and chemical application, grain harvesting and forage harvesting functions on the farm. The survey also includes many miscellaneous farming practices, lists average machine rental rates for some equipment and includes a formula for estimating average machinery rental rates. The survey also lists average custom farming rates for corn, soybeans and wheat. Over the years, the average custom rates for farm operations in Southern Minnesota have been very close to the average Iowa custom rates.

All listed custom rates in the Iowa Survey results include fuel and labor, unless listed as rental rates or otherwise specified. These average rates are only meant to be a guide for custom rates, as actual custom rates charged may vary depending on continued increase in fuel costs, availability of custom operators, timeliness, field size, etc. Following are the average custom rates for some common farming practices for 2006, based on the “Iowa Farm Custom Rate Survey”: